SEBI Charges
What is SEBI Turnover Charges and how are they calculated?
The SEBI Charges (also called SEBI Turnover Charges) is a type of fees paid by the market participants to SEBI. Some of these participants like Stock Brokers, have to pay the fees on a monthly basis. While other entities like Clearing Members and Mutual Funds etc. have to pay it on an annual basis.
The fees paid by the Stock Brokers is a variable amount and it depends on the trading Turnover of the Broker. Similarly Mutual Funds have to pay the fees depending on their average Assets Under Management (AUM) for that year. On the other hand, the Clearing Members have to pay a fixed annual amount.
SEBI
The Securities and Exchange Board of India (SEBI) is responsible for regulating the financial markets in India and this fees helps them cover the costs of their operations. That is why, sometimes this fees is also known as SEBI Regulatory Fees or SEBI Turnover fees.
On this page, we will focus on the SEBI transaction charges paid by the Stock Brokers as these are directly collected from the investors on every trade. So, if investors are buying/selling stocks for the long-term, then they would need to pay the applicable SEBI Charges for delivery of shares.
What are the current SEBI Charges?
The fees is applicable on the total trading Turnover of the Broker. This means that the charges are payable at both buy and sell time. The trading volume of every Broker is governed by the value of transactions executed by the customers of the Broker. So the brokers collect this fees directly from their clients.
In the table below, we explain the applicable rates on different types of segments, which can be directly traded by the investors.
|
Type of transaction and segment |
Applicable fees |
|
Equity |
0.0001 % (on Turnover) at Buy and Sell side |
|
Business Trust |
0.0001 % (on Turnover) at Buy and Sell side |
|
Equity Derivatives |
0.0001 % (on Turnover) at Buy and Sell side |
|
Currency Derivatives |
0.0001 % (on Turnover) at Buy and Sell side |
|
Interest rate Derivatives |
0.00005 % (on Turnover) at Buy and Sell side |
|
Commodity Derivatives (Non-Agricultural) |
0.0001 % (on Turnover) at Buy and Sell side |
|
Commodity Derivatives (Agricultural) |
0.00001 % (on Turnover) at Buy and Sell side |
|
Fixed income securities (Bonds, NCDs etc.) |
0.00002 % (on Turnover) at Buy and Sell side |
Note: This is the fees charged by SEBI to the Stock Broker. So it is not necessary that the Broker will be charging the exact same fees to their customers.
Calculation of SEBI charges for investors
As it can be observed from the above table, there is no differentiation between intraday trades and delivery trades. So, if an individual is doing intraday trading in stocks, then the SEBI charges for intraday transactions will be 0.0001 % of the total trading turnover on that day.
Let us look at a sample trade to understand how the fees is calculated for the trader.
Example
Suppose a trader does these transactions:
Buys 1,000 shares at INR 100 at 11:00 AM
Sells 200 shares at INR 105 at 01:00 PM
Sells 800 shares at INR 95, 5 days later
In this scenario, the trader ended up doing an intraday trade for 200 shares and took delivery of 800 shares.
Computation of fees
The charges are calculated separately for Buy and Sell time.
Buy time (1,000 shares)
Taxable amount: 1,000 * 100 (Buy price) = INR 1,00,000
Applicable tax (at 0.0001 %): 0.0001 % of 1,00,000 = INR 0.1
Sell time – Intraday (200 shares)
Taxable amount: 200 * 105 (Sell price) = INR 21,000
Applicable tax (at 0.0001 %): 0.0001 % of 21,000 = INR 0.021
Sell time – Delivery (800 shares)
Taxable amount: 800 * 95 (Sell price) = INR 76,000
Applicable tax (at 0.0001 %): 0.0001 % of 76,000 = INR 0.076
So the total SEBI charges applicable on this trade = 0.1 + 0.021 + 0.076 = INR 0.197
Payment of SEBI Turnover Charges
In capital markets, the obligation to pay the SEBI Charges on share trading, does not fall directly on the investors. The Brokers collect this fees from their clients at trade Settlement time and submit it to the Stock Exchange. The exchange then deposits this fees to SEBI on a monthly basis.
In addition to the Stock Broker, the different types of regulatory fees is payable by Clearing Members (also applicable on self-clearing members), Mutual Funds, Stock Exchanges, Depositories etc.
Payment by investors
The Brokers might charge a different SEBI fees from their customers. However, the amount charged will be close to the rate charged by SEBI. Therefore, investors should always check the fees structure of the Stock Broker, before they open a Trading account.
When buying/selling on the exchange, the traders do not need to submit these charges separately. The Pay in / Pay out obligation of the broker will already have the applicable fees deducted. A trader can see the breakup of the charges and taxes applicable on their trades, in the Contract Note sent by the Broker at the end of the trade day.
In case of Mutual funds, the fees is not charged by the fund houses separately and it is mostly included in the Total Expense Ratio (TER) of the funds.
Disclaimer
- This page is for education purpose only
- Some information could be outdated / inaccurate
- Investors should always consult with certified advisors and experts before taking final decision
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